Resorts World Las Vegas opens on Thursday and is already on track to have the most expensive room rates on the Strip by the Fourth of July weekend. Then, the rates will level off to match competitors, according to a survey of room rates compiled by a Wall Street firm.
The overall takeaway from the survey by Truist Securities shows Strip room rates for leisure travelers started their recovery during the second quarter and the third quarter shows a “strong outlook,” higher than the pre-pandemic period. The survey shows midweek rates are picking up as well, in another sign of the recovery of the resort industry.
The Truist survey tracks 28 casinos across the Strip over 13 weeks to get a blended average of the lowest available rate over the internet for the leisure traveler. It just started tracking Resorts World rates.
Truist pegged the Malaysia-based Genting Group’s Resorts World room rates at $459 to $469 on Friday June 25 and $479 to $489 the following day, rates that could continue to increase, but aren’t tracked by the survey, which was completed last week. Several other Strip properties tracked by Truist showed rates of $500 to $600 over the Resorts World opening weekend.
The Strip’s Fourth of July rates, meanwhile, are running well ahead of 2019 and 2020. As occupancies have tightened, properties are raising rates, according to Truist.
MGM Resort International’s rates are 26% higher than 2019 and 105% higher than 2020. Caesars Entertainment’s July Fourth rates are 13% higher than 2019 and 65% higher than 2020.
For Friday July 2, the survey shows Resorts World had the highest rate at $439. That was followed by Bellagio at $422, Wynn Las Vegas at $386, the Venetian at $376, and Caesars Palace at $252. Resort fees aren’t included.
The rates for the following week, Saturday July 10, were Resorts World at $329, with Bellagio leading the way at $593, followed by the Wynn at $519, Caesars Palace at $432, and the Venetian was $306.
“Resorts World’s prices are in line with the most premium room products on the Strip,” said Truist analyst Barry Jonas.
While Resorts World is clearly going for premium prices, there are some periods where it’s ahead of its peers and some where it’s below, Jonas said. He added that it’s “probably a function of the event calendar” and that the property needs to build up its customer base to get more business-oriented travel from the Hilton database.
“It looks promising (at the start for Resorts World), but the real question is sustainability over time as the property tails off from the initial excitement and gains it footing longer term,” Jonas said. “It’s $150 to $160 midweek for certain weeks and some weekends in August almost 300 bucks.”
For Tuesday July 13, Resorts World had a $139 rate by Truist calculations. That was below the $207 for the Venetian, $200 for Bellagio, $198 for Wynn, and $170 for Caesars Palace.
Resorts World’s 3,500 rooms are operated by Hilton and its ultra-luxury brand Crockfords. There are 130
million people in the Hilton Honors program, which analysts say means the property will have a strong start and gear up quickly.
“Anytime you can take a loyalty program for a premier hotel company, it’s a meaningful driver of room nights for the property,” Jonas said.
The Truist survey shows that the third-quarter rates for the biggest players on the Strip — MGM Resorts International and Caesars Entertainment — are up 9% and 5%, respectively, compared to 2019. On weekends, their rates are up 20% and 4% compared to 2019, but weekdays are slower to catch up: 11% lower at MGM and 2% lower at Caesars compared to 2019.
That’s a big jump from the second quarter, in which weekend rates were down 12% compared to 2019 for the entire Strip and weekday rates were down 44%. That picked up in June, when resorts were back to 100% of capacity, Jonas said. The most recent survey showed this past week’s rates were up week over week by 13% at MGM properties and 9% at Caesars properties.
“A lot of the inflection has been since the capacity restrictions were lifted at the start of June and even the end of May,” Jonas said. “What we see in the data for week on week is clearly that trends are continually improving,” Jonas said.
Not only are leisure-oriented weekends showing strength with their rates, but they’re starting to see midweek-rate increases as group business begins to recover and take occupancy, Jonas said.
“The story is, the weekends are really strong and they’re able to press higher rates,” Jonas said. “But they’re starting to press rates higher midweek as well. That could be a function of the strength of the leisure segment, but group business is also trying to come back a little. Midweek isn’t up to 2019, but it’s starting to be positive.”
The World of Concrete Convention, which normally attracts 60,000 attendees at a winter conference, had 10,000 people earlier this month.
“That’s not (a huge number historically), but it’s proof of concept that Vegas can do a conference,” Jonas said.
